Moguls and bankers are packing their bags to attend Allen & Company’s annual media conference, which starts Tuesday in Sun Valley, Idaho. The recession is bound to put a damper on this year’s schmoozefest, where the likes of Rupert Murdoch and Barry Diller regularly roam, as executives decide it is not the right time to fly off to a mountain resort.

Those who do attend will be debating the troubled state of traditional media companies and how they will fare in an increasingly digital environment.

“People in the traditional media world are terrified,” Ken Auletta, a New Yorker magazine media writer who will lead a panel on new media at this week’s conference, told Reuters.

“They’re in the analog world, and the world is becoming digital,” he said. “They’re insecure about what’s going to happen to their businesses.”

Young Web entrepreneurs have been adding new excitement to the Sun Valley conference, which has been the birthplace of some high-profile media deals. The founders of social networking sites like Facebook and Myspace and Internet video portals like YouTube and Joost drew large crowds in recent years.

This year, Evan Williams (above), the chief executive Twitter, will likely be in high demand as media moguls try to determine if the hugely popular microblogging service is a money-making opportunity or simply another Web 2.0 fad.

via Sun Valley Buzz: Tough Times and Twitter - DealBook Blog - NYTimes.com.

zyakaira notes: I've been remiss. I shouldn't neglect Facebook either, but as of now..